Hewlett-Packard Shuffles Deck Chairs, Investors Yawn

Last quarter, a now-tablet-lessHewlett-Packard (NYS: HPQ) revealed that operating income at its PC division dropped 34%, while printer profits plummeted 32%. You might think it's dark days for HP, but fear not, shareholders: HP has a plan to ensure the company's survival. It's going to change several employees' job titles, and merge printers into PCs.

Huh?Yep, that's basically the sum of what Hewlett-Packard announced last night. It could have developed a whiz-bang product to battle Apple. It could have doubled down on its 2010 alliance with Stratasys (NAS: SSYS) to find new revenue in the market for 3-D printers.

Instead, HP decided that the best way to right the ship is to shuffle some deck chairs on the Titanic.

Printing head Vyomesh Joshi is being shown the door, while surviving department head Todd Bradley absorbs the imaging and printing unit into his own personal systems division. The result, says new CEO Meg Whitman, will be "a faster, more streamlined, performance-driven H-P that is customer focused and poised to capitalize on rapidly shifting industry trends."

If only it were that easy.

Mission accomplished?Talk is cheap, as the saying goes. HP will certainly save some money from this move (if only by not having to sign Joshi's paychecks anymore). But merging a couple of units which last quarter showed 15% and 7% revenue slippage, respectively, won't add a lot to the sum of the parts.

Likely, the most visible effect of HP's move will be to boost apparent operating margins at the PC unit, which last year generated only a 5.9% operating margin on $39.6 billion in revenue. Adding imaging and printing's $25.8 billion in revenue, at their 15.4% operating-profit margin, can't help but make the PC unit look more profitable this year.

Don't be fooled by the new numbersPCs aren't getting more profitable, and they aren't generating more revenues. All HP is really doing here is plugging in some HDMI cords, and hooking a few peripherals to the tower.

Motley Fool contributorRich Smithholds no position in any company mentioned.Click hereto see his holdings and a short bio. The Motley Fool owns shares of Apple.Motley Fool newsletter serviceshave recommended buying shares of Stratasys and Apple, as well as creating a bull call spread position in Apple.